Schadenfreude won't help

US universities' income has plummeted, but we can learn from their efforts to tackle the problem, says Jon F. Baldwin

March 19, 2009

The results of the 2008 research assessment exercise provided fresh opportunities for researchers and university managers to make once again a variety of claims about their international research excellence. Tables showing world-class this and world-class that brought a moment of midwinter cheer.

But that was not enough to expunge our collective bitter memories of the Times Higher Education-QS World University Rankings last October, which told us: "The position of UK universities ... has deteriorated as the US elite cements (its) place at the top."

The sheer size of American institutions and their massive endowments seemed to set in stone their dominance of the global rankings. But then the credit crunch came and markets tumbled. The US higher education system is in shock.

The economic collapse has left presidents and provosts reeling as endowment values plummet. Some would argue that this is an indication of the excessive riskiness seen in the US system, where institutions often rely on a single source of income, whatever it may be.

However, even when endowments are not the main source of cash and tuition fees are higher, demand for those high-fee places is now uncertain. When both parents and donors are losing their jobs, will higher education become a discretionary rather than a must-have purchase?

These are tough, even unprecedented, times for the sector, particularly in the US. Is this the time to gloat that all is not well across the Atlantic? Is this the first real chink in the American armour?

In January, I visited four private US universities to compare and contrast, to see, feel and endeavour to interpret how things looked, how the economic situation was affecting those institutions, and what shape they were in compared with their UK counterparts.

I expected to see people facing tough decisions. However, what surprised me was to find that those decisions had already been made. Somehow, the universities had been able to come together to meet stark funding challenges. They had responded in a way that preserved collegiality and faculty autonomy, while emphasising the need for speed and efficiency.

Tough times call for tough, robust measures, and there was ample evidence that responsibility had not been shirked by the institutions I visited. Operating budgets were being cut, international travel limited, and where necessary there were recruitment freezes on staff and faculty positions.

The autonomy of private US institutions is striking. They can do what they need to do, and quickly, too.

So this is not the time to gloat about US misfortunes. Rather, we need to learn how power and autonomy can be used to meet economic shocks head-on.

At home, I see in some parts of our sector less willingness to find ways to deal with our own problems, and an oddly persistent view that only by a significant increase in government investment can we keep up with the best in the US, cope with the recession or both. Maybe such funding will emerge, despite the many calls on the Government in these difficult times. However, it is unlikely that a significant increase in Whitehall funding will be available in the short to medium term. Whatever the outcome, we cannot wait for it.

Others may wish to spend their time whining about US dominance, some may even try to take comfort from the financial shocks suffered by American institutions. I prefer to learn lessons from how they have used their autonomy to tackle their problems. The quickest results will come from our own action - or inaction.

The majority of US higher education institutions are private. They survive, prosper or fail on their (or the market's) terms. Of course, UK universities have far less autonomy. We face more restraints, but the best will transcend them and stand on their own feet.

In the long term, it is likely that government funding will become a diminishing part of the income of all universities. Only then can comparisons between the UK and the US gain real credence. Then we can groan and moan, or even gloat, but we shall do so based on our own efforts.

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